Final Results

•

Adjusted fully diluted EPS (1) (2) up 4.5% to 9.45 cent

•

Total revenue (1) of €3.13 billion

•

Operating profit (before exceptional credits) up 0.1% to €47.0m

•

Adjusted EBITDA (1) down 1.5% to €73.0m

•

Final dividend up 6.0% to 1.763 cent per share

•

Targeting 2015 adjusted fully diluted EPS in the range of 9.2 to 10.2 cent per share

(1)

Key performance indicators are defined overleaf

(2)

The calculation of adjusted earnings per share for 2013 is restated to ensure conformity with the current year calculation whereby fair value movements on contingent consideration are excluded from adjusted earnings. Management believe this presentation more fairly presents the underlying trading performance of the Group.

3 March 2015

TOTAL PRODUCE PLC PRELIMINARY RESULTS FOR THE

 YEAR ENDED 31 DECEMBER 2014

2014

€'million

2013

€'million

% change

Total revenue (1)

3,129

3,175

(1.4%)

Group revenue

2,667

2,638

1.1%

Adjusted EBITDA (1)   

73.0

74.1

(1.5%)

Adjusted EBITA (1)

56.7

58.7

(3.4%)

Operating profit (before exceptional credits)

47.0

46.9

0.1%

Adjusted profit before tax (1)

51.2

52.9

(3.3%)

Profit before tax

44.3

48.2

(8.1%)

Euro

cent

Euro

cent

% change

Adjusted fully diluted earnings per share (1)

9.45

9.04 *

4.5%

Basic earnings per share

8.83

9.38

(5.9%)

Diluted earnings per share

8.79

9.36

(6.1%)

Total dividend per share

2.403

2.2727

5.7%

\* The calculation of adjusted earnings per share for 2013 is restated to ensure conformity with current year calculation whereby fair value movements on contingent consideration are excluded from adjusted earnings. Management believe this presentation more fairly presents the underlying trading performance of the Group.

Total revenue includes the Group's share of the revenue of its joint ventures and associates.

Adjusted EBITDA is earnings before interest, tax, depreciation, acquisition related intangible asset amortisation charges and costs, fair value movements on contingent consideration and exceptional items. It also excludes the Group's share of these items within joint ventures and associates.

 Adjusted EBITA is earnings before interest, tax, acquisition related intangible asset amortisation charges and costs, fair value movements on contingent consideration and exceptional items. It also excludes the Group's share of these items within joint ventures and associates.

Adjusted profit before tax excludes acquisition related intangible asset amortisation charges and costs, fair value movements on contingent consideration and exceptional items. It also excludes the Group's share of these items within joint ventures and associates.

Adjusted earnings per share and adjusted fully diluted earnings per share excludes acquisition related intangible asset amortisation charges and costs, fair value movements on contingent consideration, exceptional items and related tax on such items. It also excludes the Group's share of these items within joint ventures and associates.

Forward-looking statement

Any forward-looking statements made in this press release have been made in good faith based on the information available as of the date of this press release and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in these statements, and the Company undertakes no obligation to update any such statements whether as a result of new information, future events, or otherwise. Total Produce's Annual Report contains and identifies important factors that could cause these developments or the Company's actual results to differ materially from those expressed or implied in these forward-looking statements.

Overview

Total Produce (the 'Group') has delivered a robust performance in 2014 and is pleased to report a 4.5% increase in adjusted earnings per share to 9.45 cent (2013: 9.04 cent).

The performance in the year was satisfactory in a mixed market when measured against a strong comparative period which included the results of Capespan Group Limited prior to its divestment on 23 April 2013 and the marginal adverse impact of currency translation in the year. This was partially offset by the incremental contribution from acquisitions completed in the second half of 2013 and in 2014. On a like-for-like basis excluding the effect of divestments, acquisitions and currency translation, total revenue of €3.13 billion was 2% lower than 2013. Adjusted EBITA decreased by 3.4% to €56.7m (2013: €58.7m) due to the effect of average price decreases and divestments, partially offset by the incremental contribution of acquisitions. Further details on the trading performance are outlined in the operating review that follows.

Operating profit before exceptional items amounted to €47.0m (2013: €46.9m). The Group recognised net exceptional credits in the year of €2.4m (2013: €6.5m) and a full analysis of these items are set out in Note 5 of the accompanying financial information. Operating profit after these net exceptional credits was €49.4m (2013: €53.4m). Statutory profit before tax in 2014 was €44.3m (2013: €48.2m) while adjusted profit before tax (1) decreased by 3.3% to €51.2m (2013: €52.9m).

Adjusted earnings per share (1) for the year ended 31 December 2014 of 9.45 cent (2013: 9.04 cent) represented a growth of 4.5%, assisted by lower non-controlling interests' share of profits and a lower tax charge. The calculation of adjusted earnings per share for 2013 is restated to ensure conformity with current year calculation whereby fair value movements on contingent consideration are excluded from adjusted earnings. Management believe this presentation more fairly presents the underlying trading performance of the Group.

The Group continues to generate positive cashflows with operating cashflow of €37.7m (2013: €45.0m) and free cashflow of €35.5m (2013: €45.1m).

Development activity

The Group successfully concluded a number of acquisitions and investments in 2014 with a total investment of over €22m including contingent consideration payable on the achievement of future profit targets. The Group completed an agreement to acquire the second 50% shareholding in All Seasons Fruit ('ASF') in the Netherlands, a company which specialises in the soft fruit category. An initial 20% shareholding was acquired bringing the Group's shareholding to 70% on 28 May 2014 with the balance to be acquired in subsequent years. In August 2014, the Group acquired a 45% interest in Eco Farms Investments Holdings LLC ('Eco Farms'), the Californian based avocado grower, marketer and distributor. The Group has options to acquire further shares in Eco Farms in due course to give Total Produce a majority stake. In December 2014, the Group's Healthfoods and Consumer Products division acquired the trading assets of Gaspari Nutrition ('Gaspari') out of a bankruptcy process. Gaspari is a sports nutrition company based in New Jersey. Post year-end, the Group completed an agreement to acquire a 50% interest in the Gambles Group, a North American fresh produce company based in Toronto. This represents the Group's fourth investment in North America in the past two years. Further details on these acquisitions are outlined in Note 11 of the accompanying financial information.

The Group continues to actively pursue further investment opportunities in both new and existing markets.

Dividend

The Board is proposing a 6.0% increase in the final dividend to 1.763 cent per share (2013: 1.6632 cent), subject to the approval of shareholders at the forthcoming AGM. If approved, this dividend will be paid on 22 May 2015 to shareholders on the register at 1 May 2015 subject to dividend withholding tax. The total dividend for 2014 will amount to 2.403 (2013: 2.2727) cent per share and represents an increase of 5.7% on 2013.

Operating Review

The table below details a segmental breakdown of the Group's total revenue and adjusted EBITA for the year. Segment performance is evaluated based on revenue and adjusted EBITA.

2014

2013*

Segmental revenue

€'000

Adjusted EBITA

€'000

Segmental revenue

€'000

Adjusted EBITA

€'000

Fresh Produce

- Europe - Eurozone

1,475,135

20,200

1,525,395

23,096

- Europe - Non-Eurozone

1,404,351

32,216

1,365,657

29,893

- International

190,983

2,902

226,862

3,128

Inter-segment revenue

(62,035)

-

(56,992)

-

Total Fresh Produce

3,008,434

55,318

3,060,922

56,117

Healthfoods and Consumer Products

120,404

1,372

113,906

2,588

Third party revenue and adjusted EBITA

3,128,838

56,690

3,174,828

58,705

* 2013 segment information has been restated to ensure conformity with the current year presentation.

Fresh Produce Division

The Group's core Fresh Produce division is involved in the growing, sourcing, importing, packaging, marketing and distribution of hundreds of lines of fresh fruits, vegetables and flowers. This division is split into three distinct reportable segments.

Revenue in this division decreased 1.7% in 2014 to €3,008m (2013: €3,061m). The prior year results included the results of Capespan Group Limited prior to its divestment on 23 April 2013 while the 2014 results benefited from the contribution of acquisitions completed during the second half of 2013 and in 2014. Currency translation had a marginally adverse impact on reported results in the year. On a like-for-like basis, excluding the effect of divestments, acquisitions and currency translation, total revenue of €3,008m was 2.2% lower than prior year due to average price decreases with volumes similar to prior year. The warmer weather in Spring caused the European domestic growing season to begin earlier leading to greater production and over supply resulting in downward pressure on prices particularly in some product categories in Europe. Additionally in August 2014, in an unexpected development, Russia introduced sanctions banning the import of fruits and vegetables from certain origins, including from the EU, for twelve months. Whilst the Group does not have any operations in Russia, and Group sales to Russia are modest at less than 2% of revenue, there was an impact on the market generally for certain categories, particularly apples and pears.

Adjusted EBITA in this division decreased 1.4% to €55.3m (2013: €56.1m) due to the effects of average price decreases, divestments and currency translation which were offset in part by the contribution of acquisitions completed in the second half of 2013 and in 2014.

Overall, the robust performance in these mixed market conditions is underpinned by the Group's resilient business model.

Further information on each reporting segment follows.

Europe - Eurozone

Revenue decreased by 3.3% to €1,475m (2013: €1,525m) with a 12.5% decrease in adjusted EBITA to €20.2m (2013: €23.1m). Excluding the effect of acquisitions, revenue on a like-for-like basis was down 5% due to a decrease in average prices and a marginal decrease in volumes. The decrease was due to less favourable trading conditions particularly in Continental Europe with the warm Spring leading to strong early season domestic volumes. In addition to this the impact of the Russian ban on certain imports put downward pressure on prices of certain product lines.

Europe - Non-Eurozone

This reportable segment includes businesses in Scandinavia, UK, Czech Republic and Poland. Revenue increased by 2.8% to €1,404m (2013: €1,366m) with adjusted EBITA increasing 7.8% to €32.2m (2013: €29.9m). The results benefited from the contribution of acquisitions in late 2013. The impact of currency translation in the period was not material, with weakening of the Swedish Krona and the Czech Koruna largely offset by the positive impact of strengthening of Sterling. On a like-for-like basis excluding the effects of acquisitions and currency translation, revenue was in line with the prior year with a marginal increase in volumes offsetting average price decreases.

International

This reportable segment includes the Group's businesses in North America and India and in the comparative period also included the results of Capespan Group Limited prior to its divestment on 23 April 2013. Reported revenue decreased to €191m (2013: €227m) and adjusted EBITA decreased to €2.9m (2013: €3.1m) due to the inclusion of the results of Capespan Group Limited in the comparative period.

Healthfoods and Consumer Products Distribution Division

This division is a full service marketing and distribution partner to the healthfoods, vitamins, minerals and supplements, pharmacy, grocery and domestic consumer products sectors. It markets and distributes to retail and wholesale outlets in Ireland, the United Kingdom and the United States.

Revenue increased 5.7% to €120m (2013: €114m) due to the contribution of new business and bolt-on acquisitions completed in the second half of the year. Adjusted EBITA decreased to €1.4m (2013: €2.6m) due to competitive trading conditions in some of its markets and changed product mix.

Financial Review

Net financial expense

Net financial expense in the year decreased to €5.1m (2013: €5.2m). The Group's share of the net financial expense in its joint ventures and associates was €0.4m compared to €0.6m in 2013. Net interest cover for the year was 11.1 times based on adjusted EBITA.

Exceptional items

Exceptional items in the year amounted to a net credit before tax of €2.4m (2013: net credit of €6.5m). A full analysis of these exceptional items is set out in Note 5 of the accompanying financial information.

Profit before tax

Statutory profit before tax in 2014 amounted to €44.3m (2013: €48.2m). Excluding the exceptional items, acquisition related amortisation charges and costs and fair value movements on contingent consideration, adjusted profit before tax (1) decreased by 3.3% to €51.2m (2013: €52.9m).

Taxation

The tax charge for the year including the Group's share of joint ventures and associates tax and before non-trading items, as set out in Note 6 of the accompanying financial information, was €12.0m (2013: €14.0m) representing an underlying tax rate of 23.4% (2013: 26.4%) when applied to the Group's adjusted profit before tax. The lower tax rate reflects reduced corporation tax rates in some jurisdictions and the geographical blend of profits.

Non-controlling interest

The non-controlling interest's share of after tax profits was €6.7m (2013: €7.3m). Included in the 2014 charge was the non-controlling interest's share of €1.0m (2013: €1.8m) of exceptional items and acquisition related charges and costs. Excluding these non-trading items, the non-controlling interest's share of after tax profits decreased by €1.4m in 2014. This decrease was due to a reduction in the after tax profits in a number of the Group's non-wholly owned subsidiaries in Europe partially offset by the non-controlling interest's share of after tax profits in acquisitions completed in late 2013.

Earnings per share

Adjusted fully diluted earnings per share increased 4.5% to 9.45 cent (2013: 9.04 cent) assisted by lower taxation charges, lower interest charges and the lower non-controlling interest share of after tax profits. The calculation of adjusted earnings per share for 2013 is restated to ensure conformity with current year calculation whereby fair value movements on contingent consideration are excluded from adjusted earnings. Management believe that adjusted earnings per share excluding exceptional items, acquisition related intangible asset amortisation charges and costs, fair value movements on contingent consideration and related tax on these items provides a fairer reflection of the underlying trading performance of the Group.

Basic earnings per share and diluted earnings per share after these non-trading items amounted to 8.83 cent (2013: 9.38 cent) and 8.79 cent (2013: 9.36 cent) respectively with the decrease primarily due to lower exceptional gains in 2014.

Note 7 of the accompanying financial information provides details on the calculation of the respective earnings per share amounts.

Net debt and cash flow

Net debt at 31 December 2014 was €16.8m (2013: €11.0m). The Group had cash balances (including bank deposits) of €115.8m and interest bearing borrowings (including overdrafts) of €132.6m. Net debt relative to adjusted EBITDA was 0.2 times and interest is covered 11.1 times by adjusted EBITA.

The Group generated operating cash flows of €37.7m in 2014 (2013: €45.0m) before working capital movements with the decrease primarily due to lower trading profits and higher tax payments due to timing. There were €11.7m (2013: €14.5m) of working capital inflows in the year assisted by an incremental €5.8m (2013: €12.4m) inflow from additional trade receivables financing, and working capital inflows from companies acquired mid-year. Cash outflows on routine capital expenditure, net of disposals, were €12.0m (2013: €12.9m). Dividends received from joint ventures and associates increased to €4.6m (2013: €4.1m) with dividend payments to non-controlling interests increasing to €6.5m (2013: €5.6m).

Free cash flow generated by the Group decreased to €35.5m (2013: €45.1m). Free cash flow is the funds available after outflows relating to routine capital expenditure and dividends to non-controlling shareholders but before acquisition expenditure, development capital expenditure and the payment of dividends to equity shareholders.

Cash outflows on acquisitions and contingent consideration payments relating to prior period acquisitions amounted to €22.7m (2013: €19.7m). In addition the Group assumed €10.1m of debt (2013: cash of €2.1m) on the acquisition of subsidiaries. In 2013 the Group received cash proceeds of €21.7m from the sale of its investment in Capespan Group Limited. The Group also distributed €7.6m (2013: €7.0m) in dividends to equity shareholders in the year.

There was a negative impact of €1.3m on translation of foreign currency net debt into Euro at 31 December 2014 primarily due to stronger Sterling and US Dollar exchange rates offset by the weaker Swedish Krona and Czech Koruna exchange rates compared to the rates prevailing at 31 December 2013.

2014

€'million

2013

€'million

Adjusted EBITDA

73.0

74.1

Deduct adjusted EBITDA of joint ventures and associates

(12.5)

(11.7)

Net interest and tax paid

(18.6)

(16.2)

Other

(4.2)

(1.2)

Operating cash flows before working capital movements

37.7

45.0

Working capital and other movements

11.7

14.5

Operating cash flows

49.4

59.5

Routine capital expenditure net of disposal proceeds

(12.0)

(12.9)

Dividends received from joint ventures and associates

4.6

4.1

Dividends paid to non-controlling interests

(6.5)

(5.6)

Free cash flow

35.5

45.1

Disposal of an associate interest

-

21.7

Acquisitions expenditure (including contingent & deferred consideration)

(22.7)

(19.7)

Net (debt)/cash assumed on acquisition of subsidiaries

(10.1)

2.1

Development capital expenditure

-

(1.2)

Dividends paid to equity shareholders

(7.6)

(7.0)

Proceeds from shares issued on exercise of employee share options

1.0

-

Other

(0.6)

(1.2)

Movement in net debt in the year

(4.5)

39.8

Net debt at beginning of year

(11.0)

(53.0)

Foreign currency translation

(1.3)

2.2

Net debt at end of year

(16.8)

(11.0)

Defined benefit pension obligations

The net liability in the Group's defined benefit pension schemes (net of deferred tax) increased to €23.6m (2013: €3.9m). As explained in further detail in Note 8 of the accompanying financial information the increase in liability is due to a sharp fall in discount rates used to calculate the present value of pension obligations offset partially by strong returns on pension scheme assets and a credit arising on the modification to the structure of the Group's defined benefit pension arrangements.

Shareholders' Equity

Shareholders' equity decreased €0.3m to €217.1m (2013: €217.4m). After tax profits in the year of €29.2m attributable to equity shareholders of the parent were offset by €21.7m of losses recognised directly in the statement of other comprehensive income and expense. This €21.7m net loss included remeasurement losses of €24.1m (net of deferred tax) on employee defined benefit pension schemes offset by revaluation gains of €1.6m (net of deferred tax) and currency translation gains of €0.8m that arose on translation of foreign currency denominated assets to Euro. The Group also paid €7.6m in the year in dividends to equity shareholders of the parent. In addition as described in Note 11 of the accompanying financial information the difference between the fair value of consideration paid and the book value of non-controlling interests acquired of €1.6m was recognised directly as a reduction within equity.

Share buyback

Under the authority granted at the AGM in 2014, the Group is permitted to purchase up to 10% of its issued share capital in the market if the appropriate opportunity arises at a price which would not exceed 105% of the average price over the previous five trading days. The Group continues to consider exercising the authority should the appropriate opportunity arise. The Group will seek to renew this authority at the forthcoming AGM in May 2015.

Summary and Outlook

Total Produce has delivered a robust performance in 2014 and is pleased to record a 4.5% increase in adjusted earnings per share in a mixed year for the fresh produce industry.

The Group was active in corporate development in 2014 with investments of over €22m in Europe and North America. Post year-end, the Group completed its fourth investment in North America with a 50% investment in Gambles, the Toronto based fresh produce company with annual turnover of CAD$170m.

We are also pleased to propose a 6.0% increase in the final dividend to 1.763 cent per share. The Group actively continues to pursue further investment opportunities and is targeting adjusted earnings per share for 2015 in the range of 9.2 to 10.2 cent per share.

Carl McCann, Chairman

On behalf of the Board

3 March 2015

(1)

See page two of this announcement for a definition of the Group's key performance indicators.

Copies of this announcement will be available from the Company's registered office at Charles McCann Building, Rampart Road, Dundalk, Co. Louth, Ireland and on our website at www.totalproduce.com.

Total Produce plc

Extract from the Group Income Statement

for the year ended 31 December 2014

Note

Before

exceptional

items

2014

€'000

Exceptional items

 (Note 5)

2014

€'000

Total

2014

€'000

Before

exceptional

items

2013

€'000

Exceptional items

(Note 5)

2013

€'000

Total

2013

€'000

Revenue, including Group share of joint ventures

and associates

3

3,128,838

-

3,128,838

3,174,828

-

3,174,828

Group revenue

2,667,014

-

2,667,014

2,637,693

-

2,637,693

Cost of sales

(2,302,369)

-

(2,302,369)

(2,274,977)

-

(2,274,977)

Gross profit

364,645

-

364,645

362,716

-

362,716

Operating expenses (net)

(324,414)

2,432

 (321,982)

(321,055)

6,751

(314,304)

Share of profit of joint ventures and associates

10

6,743

-

6,743

5,260

(259)

5,001

Operating profit

46,974

2,432

49,406

46,921

6,492

53,413

Financial income

1,576

-

1,576

2,123

-

2,123

Financial expense

(6,671)

-

(6,671)

(7,301)

-

(7,301)

Profit before tax

41,879

2,432

44,311

41,743

6,492

48,235

Income tax expense

6

(8,233)

(157)

(8,390)

(9,716)

(324)

(10,040)

Profit for the year

33,646

2,275

35,921

32,027

6,168

38,195

Attributable to:

Equity holders of the parent

29,218

30,936

Non-controlling interests

6,703

7,259

35,921

38,195

Earnings per ordinary share

Basic

7

8.83 cent

9.38 cent

Fully diluted

7

8.79 cent

9.36 cent

Adjusted fully diluted

7

9.45 cent

9.04 cent

Total Produce plc

Extract from the Group Statement of Comprehensive Income

for the year ended 31 December 2014

2014

€'000

2013

€'000

Profit for the year

35,921

38,195

Other comprehensive income:

Items that may be reclassified subsequently to profit or loss:

Foreign currency translation effects:

- foreign currency net investments - subsidiaries

(63)

(6,302)

- foreign currency net investments - joint ventures and associates

2,009

(2,469)

- foreign currency losses reclassified to the income statement on disposal of joint venture and associate investments

-

1,044

- foreign currency borrowings designated as net investment hedges

(590)

3,428

Gain on remeasuring available-for-sale financial asset

2,455

-

Reclassification of revaluation gain to income statement on available-for-sale financial asset becoming an associate

(2,455)

-

Effective portion of cash flow hedges, net

326

(165)

Deferred tax on items taken directly to other comprehensive income

(87)

41

Share of joint ventures and associates fair value adjustment on available-for-sale financial asset

-

(15)

Items that will not be reclassified to profit or loss:

Remeasurement (losses)/gains on employee defined benefit pension schemes

(28,666)

12,164

Revaluation gains/(losses) on property, plant and equipment, net

1,122

(1,630)

Deferred tax on items taken directly to other comprehensive income

4,636

(1,181)

Share of joint ventures and associates remeasurement losses on employee defined benefit pension schemes

(52)

(40)

Share of joint ventures and associates deferred tax on items taken directly to other comprehensive income

13

10

Other comprehensive income for the year, net of tax

(21,352)

4,885

Total comprehensive income for the year, net of tax

14,569

43,080

Attributable to:

Equity holders of the parent

7,536

36,159

Non-controlling interests

7,033

6,921

14,569

43,080

Total Produce plc

Extract from the Group Balance Sheet

as at 31 December 2014

Assets

2014

€'000

2013

€'000

Non-current

Property, plant and equipment

137,938

133,948

Investment property

7,414

7,150

Goodwill and intangible assets

162,551

157,643

Investments in joint ventures and associates

62,917

54,761

Other financial assets

698

649

Other receivables

2,999

5,090

Deferred tax assets

9,942

6,801

Employee benefits

-

3,282

Total non-current assets

384,459

369,324

Current

Inventories

49,464

48,142

Trade and other receivables

282,915

279,095

Corporation tax receivables

1,802

201

Derivative financial instruments

425

20

Bank deposits

2,000

4,740

Cash and cash equivalents

113,830

103,463

Total current assets

450,436

435,661

Total assets

834,895

804,985

Equity

Share capital

3,533

3,519

Share premium

253,565

252,574

Other reserves

(111,678)

(114,096)

Retained earnings

71,628

75,369

Total equity attributable to equity holders of the parent

217,048

217,366

Non-controlling interests

68,341

68,524

Total equity

285,389

285,890

Liabilities

Non-current

Interest-bearing loans and borrowings

114,909

114,311

Deferred government grants

1,683

1,681

Other payables

1,696

1,775

Contingent consideration

12,105

17,535

Corporation tax payable

6,794

6,973

Deferred tax liabilities

11,991

13,621

Employee benefits

27,514

7,940

Total non-current liabilities

176,692

163,836

Current

Interest-bearing loans and borrowings

17,769

4,879

Trade and other payables

343,038

340,406

Contingent consideration

10,754

6,435

Derivative financial instruments

180

645

Corporation tax payable

1,073

2,894

Total current liabilities

372,814

355,259

Total liabilities

549,506

519,095

Total liabilities and equity

834,895

804,985

Total Produce plc

Extract from the Group Statement of Changes in Equity

for the year ended 31 December 2014

Attributable to equity holders of the parent

Non-controlling

interests

€'000

Total

equity

€'000

 Share

capital

€'000

Share

premium

€'000

Currency

translation

reserve

€'000

Reval-uation

reserve

€'000

De-merger

reserve

€'000

Own shares

reserve

€'000

Other equity

reserves

€'000

Retained

earnings

€'000

Total

€'000

As at 1 January 2014

3,519

252,574

(5,273)

20,319

(122,521)

(8,580)

1,959

75,369

217,366

68,524

285,890

Comprehensive income

Profit for the year

-

-

-

-

-

-

-

29,218

29,218

6,703

35,921

Other comprehensive income:

Items that may be reclassified subsequently to profit or loss:

Foreign currency translation effects, net

-

-

790

-

-

-

-

-

790

566

1,356

Gain on remeasuring available-for-sale financial asset

-

-

-

-

-

-

2,455

-

2,455

-

2,455

Reclassification to the income statement of fair value gain on available-for-sale financial asset becoming an associate

-

-

-

-

-

-

(2,455)

-

(2,455)

-

(2,455)

Effective portion of cash flow hedges, net

-

-

-

-

-

-

207

-

207

119

326

Deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

-

(55)

-

(55)

(32)

(87)

Items that will not be reclassified subsequently to profit or loss:

Revaluation gains/(losses) on property, plant and equipment, net

-

-

-

1,212

-

-

-

-

1,212

(90)

1,122

Remeasurement losses on employee defined benefit pension schemes

-

-

-

-

-

-

-

(28,208)

(28,208)

(458)

(28,666)

Deferred tax on items taken directly to other comprehensive income

-

-

-

351

-

-

-

4,060

4,411

225

4,636

 Share of joint ventures and associates remeasurement losses on employee defined benefit pension schemes

-

-

-

-

-

-

-

(52)

(52)

-

(52)

 Share of joint ventures and associates deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

-

-

13

13

-

13

Total other comprehensive income

-

-

790

1,563

-

-

152

(24,187)

(21,682)

330

(21,352)

Total comprehensive income

-

-

790

1,563

-

-

152

5,031

7,536

7,033

14,569

Transactions with equity holders of the parent

New shares issued

14

991

-

-

-

-

(408)

408

1,005

-

1,005

Acquisition of non-controlling interests

-

-

-

-

-

-

-

(1,565)

(1,565)

(723)

(2,288)

NCI disposed on derecognition of pre-existing relationship with acquiree

-

-

-

-

-

-

-

-

-

(327)

(327)

Contribution by non-controlling interests

-

-

-

-

-

-

-

-

-

375

375

Dividends paid

-

-

-

-

-

-

-

(7,615)

(7,615)

(6,541)

(14,156)

Share-based payment transactions

-

-

-

-

-

-

321

-

321

-

321

Total transactions with equity holders of the parent

14

991

-

-

-

-

(87)

(8,772)

(7,854)

(7,216)

(15,070)

As at 31 December 2014

3,533

253,565

(4,483)

21,882

(122,521)

(8,580)

2,024

71,628

217,048

68,341

285,389

Total Produce plc

Extract from the Group Statement of Changes in Equity

for the year ended 31 December 2014 (continued)

Attributable to equity holders of the parent

Non-controlling

interests

€'000

Total

equity

€'000

 Share

capital

€'000

Share

premium

€'000

Currency

translation

reserve

€'000

Reval-uation

reserve

€'000

De-merger

reserve

€'000

Own shares

reserve

€'000

Other equity

reserves

€'000

Retained

earnings

€'000

Total

€'000

As at 1 January 2013

3,519

252,574

(1,483)

20,914

(122,521)

(8,580)

1,627

41,752

187,802

64,162

251,964

Comprehensive income

Profit for the year

-

-

-

-

-

-

-

30,936

30,936

7,259

38,195

Other comprehensive income:

Items that may be reclassified subsequently to profit or loss:

Foreign currency translation effects, net

-

-

(3,790)

-

-

-

-

-

(3,790)

(509)

(4,299)

Effective portion of cash flow hedges, net

-

-

-

-

-

-

(94)

-

(94)

(71)

(165)

Deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

-

23

-

23

18

41

Share of joint ventures and associates fair value adjustments of available-for-sale financial asset

-

-

-

-

-

-

-

(15)

(15)

-

(15)

Items that will not be reclassified subsequently to profit or loss:

Revaluation (losses)/gains on property, plant and equipment, net

-

-

-

(1,663)

-

-

-

-

(1,663)

33

(1,630)

Remeasurement gains on employee defined benefit pension schemes

-

-

-

-

-

-

-

12,019

12,019

145

12,164

Deferred tax on items taken directly to other comprehensive income

-

-

-

1,068

-

-

-

(2,295)

(1,227)

46

(1,181)

 Share of joint ventures and associates remeasurement losses on employee defined benefit pension schemes

-

-

-

-

-

-

-

(40)

(40)

-

(40)

 Share of joint ventures and associates deferred tax on items taken directly to other comprehensive income

-

-

-

-

-

-

-

10

10

-

10

Total other comprehensive income

-

-

(3,790)

(595)

-

-

(71)

9,679

5,223

(338)

4,885

Total comprehensive income

-

-

(3,790)

(595)

-

-

(71)

40,615

36,159

6,921

43,080

Transactions with equity holders of the parent

Non-controlling interests arising on acquisition

-

-

-

-

-

-

-

-

-

3,428

3,428

Acquisition of non-controlling interest

-

-

-

-

-

-

-

1

1

(423)

(422)

Contribution by non-controlling interests

-

-

-

-

-

-

-

-

-

15

15

Dividends paid

-

-

-

-

-

-

-

(6,999)

(6,999)

(5,579)

(12,578)

Share-based payment transactions

-

-

-

-

-

-

403

-

403

-

403

Total transactions with equity holders of the parent

-

-

-

-

-

-

403

(6,998)

(6,595)

(2,559)

(9,154)

As at 31 December 2013

3,519

252,574

(5,273)

20,319

(122,521)

(8,580)

1,959

75,369

217,366

68,524

285,890

Total Produce plc

Extract from the Group Statement of Cash Flows

for the year ended 31 December 2014

2014

€'000

2013

€'000

Net cash flows from operating activities before working

capital movements (Note 12)

37,715

45,031

Movements in working capital (Note 12)

11,689

14,444

Net cash flows from operating activities (Note 12)

49,404

59,475

Investing activities

Acquisition of subsidiaries

(11,499)

(4,581)

(Bank overdrafts)/cash, assumed on acquisition of subsidiaries, net

(6,746)

2,109

Cash derecognised on subsidiary becoming a joint venture

(97)

-

Acquisition of, and investment in joint ventures and associates

(3,581)

(12,148)

Loans advanced to joint ventures and associates

(180)

(210)

Dividends received from joint ventures and associates

4,562

4,056

Payments of contingent consideration

(5,524)

(2,296)

Payments of deferred consideration

(806)

-

Acquisition of property, plant and equipment

(11,473)

(13,392)

Acquisition of intangible assets -computer software

(1,269)

(1,265)

Development expenditure capitalised

(200)

(165)

Proceeds from disposal of property, plant and equipment

744

609

Proceeds from disposal of joint ventures and associates

-

21,677

Acquisition of other financial assets

(106)

(28)

Government grants received

323

153

Net cash flows from investing activities

(35,852)

(5,481)

Financing activities

Drawdown of borrowings

26,001

11,048

Repayment of borrowings

(16,706)

(47,577)

Decrease/(increase) in bank deposits

2,740

(941)

Decrease in cash held in escrow

-

11,360

Proceeds from issue of new shares

1,005

-

Capital element of finance lease repayments

(1,615)

(1,315)

Acquisition of non-controlling interests

(981)

(422)

Capital contribution by non-controlling interests

375

15

Dividends paid to non-controlling interests

(6,541)

(5,579)

Dividends paid to equity holders of the parent

(7,615)

(6,999)

Net cash flows from financing activities

(3,337)

(40,410)

Net increase in cash, cash equivalents, and bank overdrafts

10,215

13,584

Net foreign exchange difference

(1,003)

(1,366)

Cash, cash equivalents and bank overdrafts at 1 January

101,178

88,960

Cash, cash equivalents and bank overdrafts at 31 December (Note 13)

110,390

101,178

Total Produce plc

Extract from the Group Statement of Cash Flows

for the year ended 31 December 2014 (continued)

Group Reconciliation of Net Debt

for the year ended 31 December 2014

2014

€'000

2013

€'000

Net increase in cash, cash equivalents and bank overdrafts

10,215

13,584

Drawdown of borrowings

(26,001)

(11,048)

Repayment of borrowings

16,706

47,577

(Decrease)/increase in bank deposits

(2,740)

941

Decrease in cash held in escrow

-

(11,360)

Interest-bearing loans and borrowings arising on acquisition

(1,618)

-

Capital element of finance lease repayments

1,615

1,315

Other movements on finance leases

(961)

(1,187)

Finance leases arising on acquisition

(1,766)

-

Foreign exchange movement

(1,311)

2,218

Movement in net debt

(5,861)

42,040

Net debt at 1 January

(10,987)

(53,027)

Net debt at 31 December (Note 13)

(16,848)

(10,987)

Total Produce plc

Selected explanatory notes for the Preliminary Results for the year ended 31 December 2014

1.

Basis of preparation

The financial information included in this preliminary results statement has been extracted from the Group's Financial Statements for the year ended 31 December 2014 and is prepared based on the accounting policies set out therein, which are consistent with those applied in the prior year with the exception of the effect of the new accounting standards listed below. As permitted by the European Union (EU) law and in accordance with AIM/ESM rules, the Group Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and their interpretations issued by the International Accounting Standards Board (IASB) as adopted by the EU.The financial information prepared in accordance with IFRSs as adopted by the EU included in this report do not comprise "full group accounts" within the meaning of Regulation 40(1) of the European Communities (Companies: Group Accounts) Regulations 1992 of Ireland insofar as such group accounts would have to comply with the disclosure and other requirements of those Regulations. The information included has been derived from the Group Financial Statements which have been approved by the Board of Directors on 2 March 2015. The Financial Statements will be filed with the Irish Registrar of Companies and circulated to shareholders in due course. The financial information is presented in Euro, rounded to the nearest thousand where appropriate.

Changes in accounting policy and disclosures

The accounting policies adopted are consistent with those of the previous year except for the following new and amended IFRS and IFRIC interpretations adopted by the Group and Company in these financial statements.

· IFRS 10 Consolidated Financial Statements

· IFRS 11 Joint Arrangements

· IFRS 12 Disclosure of Interests in Other Entities

· IAS 27 Separate Financial Statements (2011) (Amended)

· IAS 28 Investment in Associates and Joint Ventures (2011)

· IAS 32 Financial Instruments: Presentation (Amended)

The above new standards have not had a material impact on the results and financial position of the Group for the year ended 31 December 2014. 

2.

Translation of foreign currencies

The presentation currency of the Group is Euro, which is the functional currency of the parent. Results and cash flows of foreign currency denominated operations have been translated into Euro at the average exchange rates for the period, and the related balance sheets have been translated at the rates of exchange ruling at the balance sheet date. Adjustments arising on the translation of the results of foreign currency denominated operations at average rates, and on restatement of the opening net assets at closing rates, are accounted for within a separate translation reserve within equity, net of differences on related foreign currency borrowings designated as hedges of those net investments to the extent they are effective. All other translation differences are taken to the income statement. The principal rates used in the translation of results and balance sheets into Euro were as follows:

Average rate

Closing rate

2014

2013

% change

2014

2013

% change

Canadian Dollar

1.4674

1.3685

(7.2%)

1.4015

1.4641

4.3%

Czech Koruna

27.5046

26.3221

(4.5%)

27.7147

27.3718

(1.3%)

Danish Kroner

7.4551

7.4580

0.0%

7.4463

7.4601

0.2%

Indian Rupee

80.8676

77.2560

(4.7%)

76.3804

85.2304

10.4%

Polish Zloty

4.1775

4.1875

0.2%

4.2981

4.1578

(3.4%) 

Pound Sterling

0.8028

0.8510

5.7%

0.7760

0.8319

6.7%

South African Rand

14.4120

12.8226

(12.4%)

13.9986

14.4319

3.0%

Swedish Krona

9.1075

8.6418

(5.4%)

9.4725

8.8498

(7.0%)

US Dollar

1.3295

1.3285

(0.1%)

1.2101

1.3780

12.2%

3.

Segmental Analysis

In accordance with IFRS 8 Operating Segments, the Group's reportable operating segments based on how performance is assessed and resources are allocated are as follows:

-

Europe - Eurozone Fresh Produce: This reportable segment is an aggregation of ten operating segments in the Eurozone involved in the procurement, marketing and distribution of fresh produce. These operating segments have been aggregated because they have similar economic characteristics.

-

Europe - Non-Eurozone Fresh Produce: This operating segment is an aggregation of four operating segments involved in the procurement, marketing and distribution of fresh produce in Scandinavia, United Kingdom, Poland and the Czech Republic. These operating segments have been aggregated because they have similar economic characteristics.

-

International Fresh Produce: This segment is an aggregation of operating segments outside Europe involved in the procurement, marketing and distribution of fresh produce.

-

Healthfoods and Consumer Products Distribution: This division is a full service marketing and distribution partner to the healthfoods, vitamins, minerals and supplements, pharmacy, grocery, and domestic consumer products sectors. This segment markets and distributes to retail and wholesale outlets in Ireland, the United Kingdom and the United States.

During the year the Directors have re-assessed how performance is monitored throughout the Group and as a result the Group's reportable operating segments have been re-aligned in the current year and operating segments for 2013 have been restated.

Segmental performance is evaluated based on revenue and adjusted EBITA. Management believe that adjusted EBITA, while not a defined term under IFRS, provides a fair reflection of the underlying trading performance of the Group. Adjusted EBITA represents earnings before interest, tax, acquisition related intangible asset amortisation charges and costs, remeasurement to fair value of contingent consideration estimates and exceptional items. It also excludes the Group's share of these items within joint ventures and associates. Adjusted EBITA is therefore measured differently from operating profit in the Group financial statements as explained and reconciled in full detail in the analysis that follows.

Finance costs, finance income and income taxes are primarily managed on a centralised basis. These items are not allocated between operating segments for the purpose of the information presented to the Chief Operating Decision Maker ('CODM') and are accordingly, omitted from the detailed segmental analysis that follows.

2014

2013 (Restated)*

Segmental

revenue

€'000

Third

party

revenue

€'000

Adjusted

EBITA

€'000

Segmental

revenue

€'000

Third

party

revenue

€'000

Adjusted

EBITA

€'000

Fresh Produce

- Europe - Eurozone

1,475,135

1,459,781

20,200

1,525,395

1,511,247

23,096

- Europe - Non-Eurozone

1,404,351

1,357,670

32,216

1,365,657

1,322,813

29,893

- International

190,983

190,983

2,902

226,862

226,862

3,128

Inter-segment revenue

(62,035)

-

-

(56,992)

-

-

Total Fresh Produce

3,008,434

3,008,434

55,318

3,060,922

3,060,922

56,117

Healthfoods and Consumer Products

120,404

120,404

1,372

113,906

113,906

2,588

Third party revenue and adjusted EBITA

3,128,838

3,128,838

56,690

3,174,828

3,174,828

58,705

* 2013 segment information has been restated to ensure conformity with current year presentation as explained above.

All inter-segment revenue transactions are undertaken at arm's length.

Reconciliation of segmental profits to operating profit

Below is a reconciliation of adjusted EBITA per management reports to operating profit and profit before tax per the Group income statement.

Note

 2014

€'000

2013

€'000

Adjusted EBITA per management reporting

56,690

58,705

Acquisition related intangible asset amortisation in subsidiaries

(i)

(5,969)

(6,369)

Share of joint ventures and associates acquisition related intangible asset amortisation

(i)

(1,456)

(1,593)

Remeasurement to fair value of contingent consideration estimates

(ii)

738

(901)

Acquisition related costs within subsidiaries

(iii)

(602)

(87)

Share of joint ventures and associates net financial expense

(iv)

(428)

(594)

Share of joint ventures and associates income tax

(iv)

(1,999)

(2,240)

Operating profit before exceptional items

46,974

46,921

Exceptional items (Note 5)

(v)

2,432

6,492

Operating profit after exceptional items

49,406

53,413

Net financial expense

(vi)

(5,095)

(5,178)

Profit before tax

44,311

48,235

(i)

Acquisition related intangible asset amortisation charges are not allocated to operating segments in the Group's management reports.

(ii)

Remeasurement to fair value of contingent consideration estimates are not allocated to operating segments in the Group's management reports.

(iii)

Acquisition related costs are transaction costs directly related to acquisitions of subsidiaries completed and are not allocated to operating segments in the Group's management reports.

(iv)

Under IFRS, included within profit before tax is the Group's share of joint ventures and associates profit after acquisition related intangible asset amortisation charges, tax and interest. In the Group's management reports these items are excluded from the adjusted EBITA calculation.

(v)

Exceptional items (Note 5) are not allocated to operating segments in the Group's management reports.

(vi)

Financial income and expense is primarily managed at Group level and is therefore not allocated to operating segments in the Group's management reports.

4.

Adjusted profit before tax, adjusted EBITA and adjusted EBITDA

For the purpose of assessing the Group's performance, Total Produce management believe that adjusted EBITA, adjusted profit before tax and adjusted earnings per share (Note 7) are the most appropriate measures of the underlying performance of the Group.

2014

€'000

2013

€'000

Profit before tax per the income statement

44,311

48,235

Adjustments

Exceptional items before group share of joint ventures and associates tax on exceptional items (Note 5)

(2,432)

(6,309)

Share of joint ventures and associates income tax

1,999

2,057

Acquisition related intangible asset amortisation in subsidiaries

5,969

6,369

Share of joint ventures and associates acquisition related intangible asset amortisation

1,456

1,593

Remeasurement to fair value of contingent consideration estimates

(738)

901

Acquisition related costs within subsidiaries

602

87

Adjusted profit before tax

51,167

52,933

Exclude

Net financial expense - Group

5,095

5,178

Share of joint ventures and associates net financial expense

428

594

Adjusted EBITA

56,690

58,705

Exclude

Amortisation of software costs

569

261

Depreciation - subsidiaries

13,851

13,170

Share of joint ventures and associates depreciation

1,922

1,990

Adjusted EBITDA

73,032

74,126

5.

Exceptional items

2014

2013

€'000

€'000

Credit arising from modification to the Group's defined benefit pension arrangements (a)

2,694

10,317

Gain on available-for-sale financial asset reclassified from other comprehensive income to income statement (b)

2,455

-

 Impairment of goodwill and intangible assets (c)

(1,684)

-

Impairment of property, plant and equipment (d)

(1,033)

(808)

 Gain on disposal of joint venture and associate investments (e)

-

234

 Remeasurement to fair value of pre-existing interest in an associate (f)

-

702

Fair value movements on investment property (g)

-

(3,694)

Share of joint ventures fair value movement on investment property (h)

-

(442)

Total exceptional items (after share of joint ventures and associates tax)

2,432

6,309

Share of joint ventures tax on fair value movements on investment property (h)

-

183

Exceptional items within operating profit

2,432

6,492

Net tax credit on exceptional items (a), (c) & (g)

(157)

(324)

Total

2,275

6,168

(a) Credit arising from modification to Group's defined benefit pension arrangements

Modification to the structure of the Group's defined benefit pension arrangements during 2014 resulted in a credit of €2,694,000 (2013: €10,317,000) to the income statement. The deferred tax charge on this exceptional credit amounts to €337,000 (2013: €1,290,000).

(b) Gain on available-for-sale financial asset reclassified from other comprehensive income to income statement

In March 2014, the Group reclassified its 10% interest in African Blue Limited ('African Blue') from an available-for-sale financial asset to an associate investment. African Blue is a blueberry grower in Morocco. Due to the change in the nature of the Group's involvement in this entity in early 2014, it was deemed that the Group obtained significant influence in accordance with the provisions of IAS 28 Investment in Associates and Joint Ventures (2011). In accordance with IFRS, the Group's 10% interest was fair valued in March resulting in a fair value uplift of €2,455,000. This uplift was reclassified to the income statement resulting in an exceptional gain of €2,455,000.

(c) Impairment of goodwill and intangible assets

During the year the Group recognised a charge of €1,684,000 in relation to the impairment of goodwill and intangible assets within the Group's Healthfoods and Consumer Products distribution business. A deferred tax credit of €39,000 on the impairment of the intangible assets was recognised in the income statement.

(d) Impairment of property, plant and equipment

On revaluation of the Group's properties in 2014, a property was identified in Scandinavia where the carrying value exceeded the fair value resulting in an impairment charge of €1,033,000. In 2013, two properties were identified in the UK and Ireland where the carrying value exceeded the fair value, resulting in an impairment charge of €808,000 in the 2013 income statement.

(e) Gain on disposal of associate and joint venture undertakings

In April 2013, the Group announced the completion of a transaction to sell its 25% shareholding in Capespan Group Limited for a total consideration of €21,677,000. A profit of €234,000 was recognised on disposal of this investment comprising the €1,278,000 difference between the sales proceeds and the associate's carrying value of €20,399,000 offset by the reclassification of €1,044,000 of currency translation losses from equity to the income statement.

(f) Remeasurement to fair value of pre-existing interest in an associate

In December 2013, the Group acquired a controlling interest in a company in which it had previously held an associate interest. In accordance with the provisions of IFRS, the previously held interest was remeasured at this date to fair value resulting in a remeasurement gain of €702,000 which was recognised in the income statement.

(g) Fair value movements on investment property

In 2013 fair value losses amounting to €3,694,000 were recognised in the income statement in relation to investment property along with a resulting deferred tax credit of €966,000. No fair value losses were identified in 2014 and a deferred tax credit of €141,000 was recognised due to recognition of capital losses on prior year movements.

(h) Share of joint ventures fair value movement on investment property

In 2013, the Group's share of the fair value losses on investment property within joint ventures of €259,000 net of deferred tax was recognised in the income statement. No fair value movements were identified in 2014.

6.

Income tax

2014

€'000

2013

€'000

Income tax expense

8,390

10,040

Group share of tax charge of its joint ventures and associates netted in profit before tax

1,999

2,057

Total tax charge

10,389

12,097

Adjustments

Deferred tax on amortisation of intangible assets - subsidiaries

1,360

1,578

Share of joint ventures and associates deferred tax credit on amortisation of intangible assets

398

429

Net deferred tax credit on fair value movements on investment properties - subsidiaries

141

966

Net deferred tax credit on fair value movements on investment properties - share of joint ventures

-

183

Tax impact of other exceptional items

(298)

(1,290)

Tax charge on underlying activities

11,990

13,963

The total tax charge for the year amounted to €10.4m (2013: €12.1m), including the Group's share of the tax charge of its joint ventures and associates of €2.0m (2013: €2.1m), which is netted in profit before tax in accordance with IFRS.

Excluding the impact of deferred tax credits related to the amortisation of intangibles and the tax effect of exceptional items, the underlying tax charge for the year was €12.0m (2013: €14.0m), equivalent to a rate of 23.4% (2013: 26.4%) when applied to the Group's adjusted profit before tax.

7.

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year, excluding shares purchased by the company which are held as treasury shares.

2014

€'000

2013

€'000

Profit attributable to equity holders of the parent

29,218

30,936

'000

'000

Shares in issue at beginning of year

351,887

351,887

New shares issued (weighted average)

823

-

Effect of treasury shares held

(22,000)

(22,000)

Weighted average number of shares at end of year

330,710

329,887

Basic earnings per share - cent

8.83

9.38

Diluted earnings per share

Diluted earnings per share is calculated by dividing the profit per share attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding after adjustment for the effects of all ordinary shares and options with a dilutive effect.

2014

€'000

2013

€'000

Profit attributable to equity holders of the parent

29,218

30,936

'000

'000

Weighted average number of shares at end of year

330,710

329,887

Effect of share options with a dilutive effect

1,778

460

Weighted average number of shares at end of year (diluted)

332,488

330,347

Diluted earnings per share - cent

8.79

9.36

The average market value of the Company's shares for the purpose of calculating the dilutive effect of share options was based on the quoted market prices for the year during which the options were outstanding.

Adjusted fully diluted earnings per share

Management believe that adjusted fully diluted earnings per share as set out below provides a fair reflection of the underlying trading performance of the Group after eliminating the impact of acquisition related intangible asset amortisation charges and costs, remeasurement to fair value of contingent consideration estimates, property revaluations and exceptional items and the related tax on these items.

2014

€'000

Restated*

2013

€'000